Court Overturns $16.1 Billion YPF Judgment Against Argentina

• The judgment would have represented 45% of Argentina's total 2024 budget and included $8.43 billion in damages plus $7.67 billion in prejudgment interest at 8%
• The case involved former YPF minority shareholders Petersen and Eton Park, who did not receive a tender offer when Argentina expropriated 51% of YPF for $5 billion in 2012
• UK-based litigation funder Burford Capital stood to collect much of any award, which had grown to $18 billion with interest by the time of appeal arguments

Summary: Court Overturns $16.1 Billion YPF Judgment Against Argentina

The 2nd U.S. Circuit Court of Appeals in Manhattan overturned a $16.1 billion judgment against Argentina on March 27, delivering a significant victory for President Javier Milei's economic stabilization efforts.

Background and Key Figures

The case stems from Argentina's 2012 expropriation of 51% of state oil company YPF for $5 billion under then-President Cristina Fernández de Kirchner. The government seized control without making a tender offer to YPF's second- and third-largest investors, Petersen and Eton Park, who subsequently filed suit in U.S. courts.

In September 2023, U.S. District Judge Loretta Preska awarded Petersen $14.39 billion and Eton Park $1.71 billion, totaling $16.1 billion ($8.43 billion in damages plus $7.67 billion in prejudgment interest at 8%). With accrued interest, the award had grown to $18 billion by the appeal hearing in October.

Market Implications

The judgment represented 45% of Argentina's total 2024 budget, with officials warning it could cripple the economy, which has chronically struggled with debt and high inflation. The appeals court questioned the case's U.S. jurisdiction, noting the underlying activities occurred in Argentina under Argentine law.

UK-based litigation funder Burford Capital would have collected much of any surviving award. YPF, privatized in 1993, was nationalized in 2012 amid government claims it failed to meet domestic oil and natural gas production demands.

The reversal removes a major fiscal liability as Milei works to stabilize Argentina's economy, though plaintiffs defended pursuing U.S. courts citing concerns about Argentina's "penchant for nationalism" affecting fair treatment in domestic courts.